"With this acquisition we are meaningfully expanding our orthobiologics product portfolio and strengthening our competitive position in key segments of the spine, orthopaedics and biosurgery markets," Stephen P. MacMillan, Stryker's chairman, president and chief executive officer, said in a press release. "We believe the collective talent of our sizable sales forces across multiple franchises positions us to build on Orthovita's success and accelerate sales growth."

Stryker did not provide numbers for the size of the sales forces, or provide information on how Orthovita will be integrated into Stryker although a report in the Philadelphia Business Journal indicates that Orthovita will operate as a division of Stryker and its 256 employees will remain in Malvern.

Kalamazoo-based Stryker announced it has a definitive agreement to acquire Orthovita, of Malvern, Pa., in an all-cash tender offer in which Orthovita shareholders are to receive $3.85 for each share of common stock.

The cash deal, which has been approved by the directors of both companies, was announced Monday, and is being valued at about $304 million. Stryker will also assume $12 million in debt from Orthovita.

Orthovita is a leader in synthetic bone grafts with its Vitoss product offering, and also competes in vertebral augmentation with a product called Cortoss.

It also has a biosurgery business that manufactures Vitagel, a hemostasis products designed to bleeding during surgery and after. According to information provided by Stryker, orthobiologics is a $5 billion global sales market.

Orthobiologics are materials doctors use to help speed the healing of broken bones as well as cartilage and soft tissue injuries (muscle, tendons and ligaments).

They are also used to help such tissue grow more quickly. Stryker has biomaterials and regenerative biological products for helping the human spine, face and head bones and for joint replacements.

“This transaction is a great event for our shareholders, customers and employees,” Antony Koblish, president and CEO of Orthovita said in a press release. “This transaction delivers significant value to our shareholders and allows us to combine our portfolio of orthobiologic and biosurgery products as well as our novel and unique proprietary biomaterials pipeline with Stryker’s industry-leading sales and marketing teams. We look forward confidently to an exciting future with a great partner.”

Scott Barry, a partner with venture capital and private equity firm Essex Woodlands, told the Associated Press, “With this acquisition by Stryker Corp., Orthovita will have in place an unprecedented level of resources that in combination with Stryker's industry-leading sales and marketing team will allow for maximizing the potential of their products and existing pipeline."

With Essex Woodlands Health Ventures Fund VII LP as a significant investor in Orthovita, Barry helped manage financing initiatives that helped restructure and recapitalized Orthovita to put it in a position to grow.

Koblish, told the AP that with the restructuring and recapitalization “We aggressively and successfully pursued this transaction.”

Wall Street likes the deal so far. Stryker shares
closed Monday at $63.76. up 48 cents. The stock's 52-week range is
$42.74 to $65.21. Orthovita shares closed at $3.83, up $1.10 (more than
40 percent and approaching its 52-week high) in heavy trading. Shares
have traded from $1.60 to $3.84.

Stryker, the maker of replacement knees and hips, hospital beds and surgical devices, reported revenue of $7.32 billion in 2010. The company has more than 18,000 employees worldwide, with about 3,000 of them in Kalamazoo County. Orthovita reported revenue of $95 million in 2010. It is located about 25 west of Philadelphia.

Orthovita shares are traded on the Nasdaq stock exchange under the ticker symbol VITA. Stryker is traded on the New York Stock Exchange, as SYK.